NH Korindo Sekuritas Indonesia

Hanjaya Mandala Sampoerna (HMSP) Tbk

  Menanti Tarif Cukai 2019

Company Report | Nov 02, 2018 Peningkatan Penjualan 10,4% pada 3Q18

  HMSP mencatatkan pertumbuhan penjualan 10,4% dari Rp25,7 triliun pada

Hold

  3Q17 menjadi Rp28,3 triliun pada 3Q18. Penopang pertumbuhan ini adalah

Dec 2019 TP (IDR) 4,225

  divisi

  sigaret kretek mesin (SKM)—berkontribusi 70% terhadap total Consensus Price (IDR) 4,092 penjualan— yang bertumbuh 14,2% dari Rp17,2 triliun pada 3Q17 menjadi

  TP to Consensus Price +3.3%

  Rp19,7 triliun pada 3Q18. Sementara itu, divisi sigaret kretek tangan (SKT) dan

  vs. Last Price +13.3%

  sigaret putih mesin (SPM) masing-masing mencatatkan pertumbuhan penjualan 5,9% dan -3,7%.

  Shares data Last Price (IDR) 3,730

Estimasi Penurunan Tipis Margin Laba Kotor

  Price date as of Oct 31, 2018

  Margin laba kotor HMSP diperkirakan akan turun dari 24,4% pada 2017 menjadi

  52 wk range (Hi/Lo) 5,500 / 3,280

  23,5% pada 2018. Penurunan ini dipicu oleh peningkatan porsi beban pita cukai

  Free float (%)

  7.5 dari 48% terhadap penjualan 9M17 menjadi 51% terhadap penjualan 9M18. Outstanding sh.(mn) 116,318

  Pemerintah meningkatkan pajak pita cukai 11% atas SKM tier 1 dari Rp530/

  Market Cap (IDR bn) 424,560 batang pada 2017 menjadi Rp590/batang pada 2018.

Peningkatan pajak pita

  Market Cap (USD mn) 28,027 cukai yang melebihi inflasi menyebabkan margin kotor HMSP tertekan. Avg. Trd Vol - 3M (mn)

  14.81 Avg. Trd Val - 3M (bn)

  55.88 Menantikan Pengumuman Bea Pita Cukai 2019 Foreign Ownership 1.57%

  Pemerintah menargetkan penerimaan perpajakan APBN 2019 meningkat 15,4% dari outlook APBN 2018. Namun, kenaikan tarif cukai rokok pada 2019 belum

  Consumer Staples

  ditentukan. Sentimen positif terhadap industri rokok terjadi Cigarette

  jika kenaikan bea Bloomberg HMSP IJ cukai rokok lebih rendah dari 10%. Reuters HMSP.JK

Target Harga Rp4.225

  Kami menggunakan estimasi forward P/E sebesar 35,7x (rata-rata 3 tahun) untuk

Share Price Performance

  memperoleh target harga pada Desember 2019. Target harga ini mengimplikasikan P/E 2019/E sebesar 37,8x. Saat ini, HMSP diperdagangkan pada P/E 2018/E sebesar 33,4x.

Hanjaya Mandala Sampoerna Tbk | Summary (IDR bn) 2017 2018E 2019F 2020F

  Sales 99,091 106,596 114,176 122,296

  Sales growth 3.8% 7.6% 7.1% 7.1%

  EBITDA 16,696 16,972 18,144 19,069 Net Profit 12,671 13,005 13,827 14,510 EPS (IDR) 109 112 119 125

  EPS growth 0.7% 2.6% 6.3% 4.9%

• - YTD

  1M

  3M

  12M

  BVPS (IDR) 293 299 307 315

• Abs. Ret. -21.1% -3.1% 2.9% 6.3%

  EBITDA margin 16.8% 15.9% 15.9% 15.6%

  NPM 12.8% 12.2% 12.1% 11.9% ROE 37.1% 37.5% 38.7% 39.6% ROA

• Rel. Ret. -12.9% -0.7% 1.1% 3.4%

  29.4% 30.2% 31.0% 32.0%

  ROIC 35.3% 35.4% 36.7% 37.6% P/E 43.4x 33.4x 31.4x 29.9x P/BV 16.1x 12.5x 12.1x 11.8x EV/EBITDA 32.5x 25.2x 23.5x 22.4x Joni Wintarja

• 62 21 797 6202, ext:138

  DPS (IDR) 107 110 117 123

  Dividend yield 2.3% 3.0% 3.1% 3.3% joni.wintarja@nhsec.co.id Source: Company Data, Bloomberg, NHKS Research

  Please consider the rating criteria & important disclaimer

  Source: Company, NHKS Research HMSP Quarterly Sales by Volume | 3Q16 - 3Q18

  Source: Company, NHKS Research HMSP Quarterly Sales | 3Q16 - 3Q18

  Hand-rolled Clove Cigarettes Sales | 3Q16 - 3Q18 Source: Company, NHKS Research

  SKM Tier 1 Excise Tax (IDR) | 2013 - 2018 Source: Ministry of Finance, NHKS Research

  Performance Highlights Machine-made Clove Cigarettes Sales | 3Q16 - 3Q18

  Source: Company, NHKS Research White Cigarettes Sales Growth | 3Q16 - 3Q18

  Source: Company, NHKS Research

  3Q18 review (IDR bn)

  3Q18

  3Q17

  4Q17

  1Q18

  2Q18

  4Q18E Actual Estimate y-y q-q surprise

  Sales 25,704 26,798 23,136 26,021 28,377 27,506 10.4% 9.1% 3.2% 29,061 Gross Profit 6,195 6,625 5,496 5,933 6,879 7,003 11.0% 15.9% 1.8% 6,730

• - Gross Margin 24.1% 24.7% 23.8% 22.8% 24.2% 25.5% 0.1% 1.4% 1.2% 23.2%
• - EBIT 4,195 4,290 3,780 3,842 4,538 4,863 8.2% 18.1% 6.7% 4,198
• - - - EBIT Margin 16.3% 16.0% 16.3% 14.8% 16.0% 17.7% 0.3% 1.2% 1.7% 14.4%

  EBITDA 4,356 4,407 3,956 3,963 4,732 5,033 8.6% 19.4% 6.0% 4,321

• - - - EBITDA Margin 16.9% 16.4% 17.1% 15.2% 16.7% 18.3% 0.3% 1.4% 1.6% 14.9%

  

Net Profit 3,288 3,333 3,032 3,080 3,577 3,802 8.8% 16.1% -5.9% 3,315

• - - Net Margin 12.8% 12.4% 13.1% 11.8% 12.6% 13.8% 0.2% 0.8% 1.2% 11.4%

  Source: Bloomberg, NHKS research

Earnings revision (IDR bn) 2018E 2019F 2020F

  Sales Revised 106,596 114,176 122,296

• Previous 105,413 112,742 118,959
• Change 1.1% 1.3% 2.8%
• - Gross Profit Revised 25,038 26,791 28,335
• Previous 25,387 27,125 28,264
• - - -

  Change 1.4% 1.2% 0.2% Gross Margin Revised 23.5% 23.5% 23.2%

• Previous 24.1% 24.1% 23.8%
• EBIT Revised 16,357 17,493 18,375
• Previous 16,935 18,085 18,726
• - - - -

  Change 3.4% 3.3% 1.9%

• - EBIT Margin Revised 15.3% 15.3% 15.0%
• Previous 16.1% 16.0% 15.7%
• EBITDA Revised 16,972 18,144 19,069
• Previous 17,525 18,710 19,389
• - - -
• - -

  Change 3.2% 3.0% 1.7% EBITDA Margin Revised 15.9% 15.9% 15.6%

• Previous 16.6% 16.6% 16.3%
• Revised

  Net Profit 13,005 13,827 14,510

• Previous 13,414 14,263 14,735
• - - - - -

  Change

  3.0% 3.1% 1.5%

  Net Margin Revised 12.2% 12.1% 11.9%

• Previous 12.7% 12.7% 12.4%
• Source: NHKS research

Sekilas tentang HMSP

  HMSP sebagai penguasa 33% pangsa pasar rokok di Indonesia merupakan perusahaan rokok terbesar di Indonesia. Pada awal pendiriannya, HMSP merupakan perusahaan yang dimiliki keluarga Sampoerna. Namun sejak Mei 2005 mayoritas sahamnya dimiliki oleh Philip Morris International—perusahaan termbakau international terkemuka di dunia. HMSP memproduksi rokok di 7 fasilitas produksi yang dimiliki sendiri, meliputi 2 fasilitas produksi SKM di Pasuruan, Jawa Timur dan Karawang, Jawa Barat, Sementara itu 5 fasilitas produksi SKT meliputi 3 fasilitas produksi di Surabaya, dan 2 fasilitas produksi lainnya, masing-masing di Malang dan Probolinggo. HMSP memproduksi sejumlah merek rokok kretek yang dikenal luas di Indonesia, yaitu Sampoerna A, Sampoerna Kretek, Sampoerna U, serta “Raja Kretek” legendaris, Dji Sam Soe.

  Daya Saing HMSP di Asia Pasifik Untuk perusahaan rokok dengan kapitalisasi pasar melampaui USD10 miliar, HMSP memiliki ROE yang paling tinggi: 41,8%.

  Kemudian, ITC Ltd, perusahaan rokok di India, memiliki ROE tertinggi kedua: 22,8%. Valuasi P/E LTM HMSP yang sangat tinggi hingga 32,6x menjadikan HMSP sebagai emiten dengan valuasi tinggi di Asia Pasifik. Namun, dengan free floating yang hanya 7,5%, valuasi HMSP yang mahal menunjukkan bahwa minat investor pada HMSP cukup tinggi.

Asia Pacific Cigarette Company Market Sales Net Profit Net Profit Asset Net ROE P/E Company Cap LTM LTM Growth P/BV (USD mn) Margin LTM LTM (USD mn) (USD mn) (USD mn) LTM Indonesia

  HM Sampoerna 28,028 3,175 7,501 936 0.03% 12.5% 41.8% 32.6x 13.5x Gudang Garam 9,225 4,913 6,591 582 8.05% 8.8% 19.6% 17.3x 3.3x

India

  ITC Ltd 45,970 9,869 6,689 1,748 9.54% 26.1% 22.8% 29.9x 6.4x

  VST Industries Ltd 673 163 147 28 20.04% 19.2% 32.5% 27.3x 8.5x Godfrey Phillips India Ltd 547 379 355 25 15.94% 6.9% 9.2% 25.3x 2.2x Kothari Products Ltd 43 547 976 9 26.90% 0.9% 5.6% 5.7x 0.3x

• Malaysia

  British American Tobacco 2,108 257 683 107 38.20% 15.7% 102.2% 20.3x 20.9x

• Pakistan

  Pakistan Tobacco Co Ltd 4,613 291 462 106 36.93% 22.9% 82.7% 50.5x 33.7x

Philippines

  PTFC Redevelopment Corp 19 8 3 1 16.49% 34.0% 16.5% 17.7x 3.2x

South Korea

  KT&G CORP 12,059 9,346 4,035 1,026 8.52% 25.4% 15.8% 10.8x 1.6x

• Sri Lanka

  Ceylon Tobacco Co Plc 1,504 162 214 107 31.09% 50.0% 256.9% 15.9x 37.0x

Vietnam

  CAT LOI JSC 39 34 84 6 6.74% 6.6% 22.6% 7.8x 1.5x NGAN SON JSC 9 20 28 1 13.79% 2.3% 9.1% 14.2x 1.3x

• Source: Bloomberg

Multiple Valuation Forward P/E band | Last 3 years Dynamic Forward P/E band | Last 3 years

  Source: NHKS research Source: NHKS research Rating and Target Price Update

Target Price Revision Date Rating Target Price Last Price Consensus vs Last Price vs Consensus

  03/16/2018 Buy 5,025 (Dec 2018) 4,310 4,552 +16.6% +10.4% 05/31/2018 Buy 4,575 (Dec 2018) 3,850 4,311 +18.8% +6.1% 09/04/2018 Hold 4,300 (Dec 2018) 3,790 4,098 +13.5% +4.9% 11/02/2018 Hold 4,225 (Dec 2019) 3,730 4,092 +13.3% +3.3%

  Source: NHKS research, Bloomberg

Analyst Coverage Rating Closing and Target Price

  Source: Bloomberg Source: NHKS research

NH Korindo Sekuritas Indonesia (NHKS) stock ratings

  1. Period: End of year target price

  2. Rating system based on a stock’s absolute return from the date of publication

   Buy : Greater than +15%

   Hold : -15% to +15%

   Sell : Less than -15% Summary of Financials

  

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  VALUATION INDEX CASH FLOW STATEMENT OWNERSHIP

  0.3 INCOME STATEMENT PROFITABILITY & STABILITY BALANCE SHEET

  0.2 Vanguard Group

  0.3 Net Changes in Cash 2,446 (747) 234 315 Luxembourg

  0.2 Blackrock

  0.4 Financing Cash Flow (12,550) (12,381) (12,823) (13,610) Canada

  0.8 Schroder Investment

  92.5 Investing Cash Flow (386) (612) (896) (869) United States

  86 Basic EPS (IDR) 109 112 119 125

Total Liabilities 9,028 8,376 8,906 8,714 Diluted EPS (IDR) 109 112 119 125

Capital Stock & APIC 20,914 21,001 21,001 21,001 BVPS (IDR) 293 299 307 315

Retained Earnings 12,582 13,106 14,123 15,013 Sales PS (IDR) 852 916 982 1,051

Shareholders' Equity 34,113 34,723 35,739 36,629 DPS (IDR) 107 110 117 123

(IDR bn) 2017/12A 2018/12E 2019/12E 2020/12E By Geography % Shareholders %

Operating Cash Flow 15,382 12,247 13,953 14,795 Indonesia 98.4 Philip Morris Ind.

  88

  

(IDR bn) 2017/12A 2018/12E 2019/12E 2020/12E 2017/12A 2018/12E 2019/12E 2020/12E

Sales 99,091 106,596 114,176 122,296 ROE 37.1% 37.5% 38.7% 39.6%

Growth 3.8% 7.6% 7.1% 7.1% ROA 29.4% 30.2% 31.0% 32.0%

COGS (74,876) (81,558) (87,385) (93,961) ROIC 35.3% 35.4% 36.7% 37.6%

Gross Profit 24,216 25,038 26,791 28,335 Cash Dividend (IDR bn) 12,481 12,811 13,620 14,293

Gross Margin 24.4% 23.5% 23.5% 23.2% Dividend Yield 2.3% 3.0% 3.1% 3.3%

Operating Expenses (8,119) (8,681) (9,298) (9,959) Payout Ratio 98.5% 98.5% 98.5% 98.5%

EBIT 16,097 16,357 17,493 18,375 DER 0.3% 0.4% 0.3% 0.3%

EBIT Margin 16.2% 15.3% 15.3% 15.0% Net Gearing 0.8% 0.9% 0.8% 0.8%

Depreciation 598 615 651 693 LT Debt to Equity 0.2% 0.3% 0.2% 0.2%

EBITDA 16,696 16,972 18,144 19,069 Capitalization Ratio 0.3% 0.4% 0.3% 0.3%

EBITDA Margin 16.8% 15.9% 15.9% 15.6% Equity Ratio 79.1% 80.6% 80.1% 80.8%

Interest Expenses (9) (11) (12) (11) Debt Ratio 0.3% 0.3% 0.2% 0.3%

EBT 16,895 17,252 18,389 19,273 Financial Leverage 126.5% 124.1% 124.9% 123.8%

Income Tax (4,224) (4,247) (4,562) (4,763) Current Ratio 527.2% 581.6% 555.2% 580.3%

Minority Interest - - - - Par Value (IDR)

  81

  34 EPS CAGR (3-Yr) 7.6% 7.9% 2.7% 4.6% LT Debt

  31

  36

  29

  4 Net Profit 12,671 13,005 13,827 14,510 Total Shares (mn) 116,318 116,318 116,319 116,320

Growth -0.7% 2.6% 6.3% 4.9% Share Price (IDR) 4,730 3,730 3,730 3,730

Net Profit Margin 12.8% 12.2% 12.1% 11.9% Market Cap (IDR tn) 550.2 433.9 433.9 433.9

(IDR bn) 2017/12A 2018/12E 2019/12E 2020/12E 2017/12A 2018/12E 2019/12E 2020/12E

Cash 7,502 6,755 6,989 7,304 Price /Earnings 43.4x 33.4x 31.4x 29.9x

Receivables 3,598 3,870 4,146 4,440 Price /Book Value 16.1x 12.5x 12.1x 11.8x

Inventories 18,023 19,632 19,837 20,043 Price/Sales 5.6x 4.1x 3.8x 3.5x

Total Current Assets 34,180 34,197 35,471 36,007 PE/EPS Growth -60.4x 12.6x 5.0x 6.1x

Net Fixed Assets 7,005 7,117 7,304 7,509 EV/EBITDA 32.5x 25.2x 23.5x 22.4x

Other Non Current Assets 1,956 1,785 1,871 1,828 EV/EBIT 33.7x 26.1x 24.4x 23.2x

Total Assets 43,141 43,099 44,645 45,343 EV (IDR bn) 542,792 427,235 426,992 426,690

Payables 3,666 3,994 4,040 4,086 Sales CAGR (3-Yr) 7.1% 6.2% 6.1% 7.3%

ST Bank Loan

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